The real offshore corporation vs shell firm

Real offshore corporation vs shell enterprise: if you are looking to create a new firm in order to maximise profits, through minimising tax payments or operating with greater confidentiality, then you are likely asking yourself a question.

Namely: should I set up a proper offshore company or a shell company for this venture? Both possibilities have their benefits and disadvantages, and you will want to know them all before you make your decision. Here at Coddan, we have years of experience helping entrepreneurs register efficient and effective companies all over the world.

Knowing the difference: a shell company is, essentially, a business without any active operations or assets. Usually, the owner will launch his or her shell company as a way of avoiding the tax owed by a larger organisation. Another common usage is for one company to do business with another company without the two ever becoming associated.

A real offshore company, on the other hand, is a fully accredited business that has been registered in a financial jurisdiction that has particularly favourable laws for business owners. By founding a company in one of these states, you can avoid most or all of the red-tape involved with floating a similar company in the UK, while avoiding tax and maximising profit potential.

If you set up an offshore company in a place like the British Virgin Islands, the Cayman Islands or Belize, you can operate with an extraordinary amount of privacy. In these states, you do not need to keep public records or disclose the names of those associated with the business to the local authorities. Plus, you will pay no, or next-to-no, tax.

There are pros and cons to both shell companies and real offshore companies and, depending on what you are hoping to achieve with your company, either can be suitable for your needs. For more advice, contact one of our expert agents today.

Though shell companies are not illegal, they often are used to hide grey market activities and many people view them with suspicion. It can colour a company in bad light if they are seen to be operating numerous shells.